Regulators in New York and Massachusetts have taken steps to increase oversight of sports betting licensees’ use of artificial intelligence and machine learning. The moves followed media coverage that DraftKings might use AI to target losing bettors; that use was not confirmed in the available reporting.
The steps could increase scrutiny of licensees’ use of AI and machine learning in sports betting.
Quarter ended 30 September 2026
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Maine’s Gambling Control Unit said it is monitoring betting operators’ use of artificial intelligence locally and nationally. The unit said Maine has no laws or regulations specifically governing AI use by betting companies, and it has not announced an investigation or rulemaking.
The CFTC filed a lawsuit in New York and an amicus brief in Massachusetts to defend its asserted authority over prediction markets. It seeks a ruling that federal law gives it exclusive jurisdiction over event contracts and an injunction blocking New York from applying state gambling laws to CFTC registrants; the Massachusetts filing supports Kalshi in its case there.
A group of 40 state attorneys general asked the US Supreme Court to consider New Jersey’s prediction markets dispute. New Jersey wants to reverse an appellate decision giving federal commodity-trading legislation priority over its gambling rules.
Forty state attorneys general, drawn from both parties and speaking for 39 states plus Washington, D.C., have signed an amicus brief asking the US Supreme Court to take up New Jersey's suit against prediction market operators. The filing backs New Jersey's effort to reverse a decision by a lower appellate court, which held that the state's gambling statutes were displaced by federal commodity-trading law.
Reportedly, Prediction markets and the challenges of overseeing them were discussed on Thursday at the NEXTPredict conference in New York, where federal officials and industry participants addressed the issue.
At the NEXTPredict conference on Thursday, the oversight difficulties facing prediction markets were the main topic. Federal regulators and industry executives were among those who discussed e...
Attorney Josh Sterling said prediction market operators could pursue state sportsbook licences or expand into other financial products if the Supreme Court rules against their sports event contracts. New Jersey has asked the court to review the dispute after the Third Circuit ruled for Kalshi in April. The justices have not agreed to hear the case.
Attorney Josh Sterling told the NEXTPredict conference in New York on Friday that prediction market firms have options should the justices side against them on sports event contracts. Those options, the Milbank partner and former Commodity Futures Trading Commission official said, include applying for sportsbook licences, moving deeper into other financial products, or creating offerings that earn more. Covers reported his remarks. New Jersey wants the Supreme Court to settle the matter following the Third Circuit's April decision for Kalshi, but the justices have not yet granted review.